ECB chief says instant payments could break Visa/Mastercard duopoly

One of the European Central Bank (ECB) board members, Yves Mersch, recently said that “for merchants, instant payments at the POI (point of interaction) could be a cost-efficient alternative to cards”. This is hardly a new idea (I’ve written about it frequently) and I think that there is a general feeling in the cards business that credit transfers could take a third or so of the card volume in a post-PSD2 Europe. There are really three reasons for this:

First of all,
Secondly,
Finally I think that the reason why credit transfer will be big is that it won’t be only banks and merchants instructing these transfers. As I wrote for Wired magazine back in 2017, it will be the internet giants. As I said then, "Facebook will ask for (and get) direct access to your bank account and the payments infrastructure. Next time you need to send your friend a tenner, you'll instant-message them the money, rather than opening up your boring bank app, fiddling about finding their bank details, authenticating yourself again and finally firing off the cash”.

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There is no excuse for not taking cards

So we went to the pub. For lunch. Seven of us. Say £20 per head. £100+ quid. Say £50 quid gross for the pub. Colleague goes to order food and drinks and pay at the bar. Apologetic barmaid comes over to explain that their “card machine” is down, so she can only accept cash. Under normal circumstances I would have simply walked out, feeling it wholly inappropriate to reward such a poorly managed establishment and, as a functioning actor in a capitalist economy, done my duty to depress their lunchtime takings. Here’s what we wanted to say: This is absurd. This is 2016 not 1916. Your card machine is down? Well, so what! Are you seriously telling me that mein host has no mobile phone number capable of registering for PingIt or PayM? That none of the staff or the pub itself have a PayPal account that I can send the money to? That neither the owners nor managers not contingency planners thought to tuck an iZettle behind the bar to use when the clunky and expensive GPRS terminal fails for o...

Financial Cryptography: Corda Day - a new force

Forum friend Ian Grigg, who I always take very seriously indeed on any such topic, wrote about Corda on his blog and concluded with a powerful statement. Bitcoin told the users it wanted an unstoppable currency - sure, works for a small group but not for the mass market. Ethereum told their users they need an unstoppable machine - which worked how spectacularly with the DAO? Not. What. We. Wanted. Corda is the only game in town because it's the only one that asked the users. It's that simple. From Financial Cryptography: Corda Day - a new force xxx It seems to me, however, what Ian is pointing to as the greatest strength of their approach is also the greatest weakness. A staple feature of unimaginative management consultants presentations about innovation is some variation on the statement by Henry Ford that if you had asked users what they wanted, they would have asked for faster horses coupled with some variation on the statement by Steve jobs that it was pointless ask...

We could fix mobile security, you know. We don't, but we could

Earlier in the week I blogged about mobile banking security , and I said that in design terms it is best to assume that the internet is in the hands of your enemies. In case you think I was exaggerating… The thieves also provided “free” wireless connections in public places to secretly mine users’ personal information. From Gone in minutes: Chinese cybertheft gangs mine smartphones for bank card data | South China Morning Post Personally, I always use an SSL VPN when connected by wifi (even at home!) but I doubt that most people would ever go to this trouble or take the time to configure a VPN and such like. Anyway, the point is that the internet isn’t secure. And actually SMS isn’t much better, which is why it shouldn’t really be used for securing anything as important as home banking. The report also described how gangs stole mobile security codes – which banks automatically send to card holders’ registered mobile phones to verify online transactions – by using either a Trojan...

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